ACIT CEN CIR 24, THANE V. JAYARAM K SHETTY, MUMBAI

ITA 6491/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8371 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 01-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 03-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K G KUTTY
• Assessee Lawyers: VIJAY H PATIL
• Keywords: Capital asset; Search and seizure; Salary income; Charitable institution; Onus to prove
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I , MUMBAI BEFORE SHRI P. M. JAGTAP, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. : 6491/MUM/2010 ASSESSMENT YEAR : 2007-08 ACIT, CEN. CIR. 24, ROOM NO.404, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020 VS. SHRI JAYARAM K. SHETTY 215, B.C.I. SHED, AMROLIWALA COMPOUND, N.M. JOSHI MARG, MUMBAI-400 013 PAN NO: AADPS 5939 D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K . G. KUTTY RESPONDENT BY : SHRI VIJAY H. PATIL DATE OF HEARING : 11.10 .2012 DATE OF PRONOUNCEMENT : 31.10.2012 ORDER PER AMIT SHUKLA, J.M. : THIS APPEAL HAS BEEN PREFERRED BY THE DEPARTMENT A GAINST ORDER DATED 14.06.2010 PASSED BY THE LD. CIT-39, MUMBAI F OR THE QUANTUM OF ASSESSMENT PASSED U/S.143(3) R.W.S 153A FOR THE ASS ESSMENT YEAR 2007- 08, MAINLY ON THE FOLLOWING GROUND :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFF ICER TO DELETE THE ADDITION OF `. 10 LAKHS MADE ON ACCOUNT OF ALLEGED PAYMENT MADE TO BUNTAR BHAVANA (COMMUNITY HALL), WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO ( A) FURNISH THE PAN OF THE DONORS TO ESTABLISH THEIR IDENTITIES AND (B) SATISFACTORILY EXPLAIN THE CIRCUMSTANCES UNDER WHIC H DONATIONS WERE MADE TO THE ASSESSEE CONCERN INSTEAD OF BUNTAR BHAVAN DIRECTLY. ITA NO : 6491/MUM/2010 SHRI JAYARAM K. SHETTY 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND DERIVES INCOME FROM HOUSE PROPERTY, INCOME FROM BUS INESS, INCOME FROM OTHER SOURCES AND SALARY INCOME. A SEARCH AND SEIZ URE OPERATION U/S.132(1) WAS CARRIED ON AT ASSESSEES OFFICE PREM ISES ON 11.09.2007. DURING THE COURSE OF THE SEARCH AND SEIZURE OPERATI ON, A DIARY WAS SEIZED FROM WHERE IT WAS FOUND THAT THE ASSESSEE HAS ADVAN CED AN AMOUNT OF `. 17,02,650/- TO MEMBERS OF THE CLUB AGAINST THE SECU RITY OF JEWELLERY. APART FROM IT, THE ASSESSEE HAS ALSO ADMITTED THE P AYMENT MADE TO VARIOUS PERSONS AGGREGATING TO `. 5,40,000/-. THIS WAS OFFERED FOR TAX IN THE RETURN FILED IN RESPONSE OF NOTICE U/S.153A. IT WAS FURTH ER OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS PAID SUM OF `. 10 LAKHS ON 20.03.2007 TO BUNTAR BHAVANA (COMMUNITY HALL). IT WAS SUBMITTED BY THE ASSESSEE THAT THE SAID PAYMENT OF `. 10 LAKHS WAS MADE OUT OF VARIOUS AMOUNTS COLLECTED FROM DIFFERENT MEMBERS OF HIS COM MUNITY SPREAD OVER ENTIRE MUMBAI AS DONATION. IN SUPPORT OF HIS CONTE NTION, THE ASSESSEE HAS SUBMITTED A CONFIRMATION LETTER WHICH IS COMMON FOR ALL THE MEMBERS/ PERSONS CONFIRMING THE AMOUNT OF PAYMENT FOR DONATI ON FOR BUNTAR BHAVANA (COMMUNITY HALL) TO THE ASSESSEE ALONG WITH THE DETAILS. THE ASSESSING OFFICER REJECTED THE SAID CONTENTION ON T HE GROUND THAT THE ASSESSEE HAS FAILED TO SUBMIT THE PAN DETAILS OF TH E DONORS AND ACCORDINGLY HE ADDED THE SAID SUM AS HAVE BEEN MADE FROM UNDISCLOSED SOURCES. 3. BEFORE THE LD. CIT(A), IT WAS SUBMITTED BY THE A SSESSEE THAT THE ASSESSEE IS A SOCIAL WORKER AND HAS LOT OF FRIENDS AND RELATIVES ALL ACROSS MUMBAI AND WAS IN A HABIT OF HELPING THE NEEDY FRIE NDS AND RELATIVES. HE USED TO RUN JANTA SOCIAL CLUB CONSISTING OF MORE TH AN 500 MEMBERS THROUGH WHICH HE USED TO MOBILISE THE FUNDS FOR SOC IAL CAUSE. IT WAS FURTHER SUBMITTED THAT BUNTS SANGHA, MUMBAI IS A PU BLIC CHARITABLE TRUST LOCATED AT KURLA WHICH NEEDED FUND FOR CONSTRUCTION OF BUILDING ITA NO : 6491/MUM/2010 SHRI JAYARAM K. SHETTY 3 SCHOOL/COMMUNITY HALL FOR WHICH THEY HAVE APPROACHE D THE ASSESSEE FOR DONATION. IT WAS IN PURSUANCE TO THIS, THAT THE AS SESSEE HAS COLLECTED THE FUND OF `. 10 LAKHS FROM VARIOUS FRIENDS AND RELATIVES AS DONA TION AND GIVEN THE SAME TO THE TRUST. IT WAS ALSO SUBMITTED THAT IN RESPECT OF THIS THE ASSESSEE HAS FILED NECESSARY DETAILS SUCH AS NAME A ND ADDRESSES OF THE DONORS AND THEIR JOINT CONFIRMATIONS. THE LD. CIT( A) ACCEPTED THE ASSESSEES CONTENTION AFTER OBSERVING AND HOLDING A S UNDER :- 7. I HAVE GONE THROUGH THE ISSUE. IT IS SEEN THAT THE PAYMENT OF `. 5 LAKHS TO THE BUNTS SANGHA ON 06.09.2005 IS NOTED INT EH SEIZED DIARY. THE APPELLANT HAS EXPLA INED THE NOTICE IN HIS SWORN STATEMENT DATED 05.11.2007 AS F OLLOWS :- PAGE NO.9 (I) THIS IS NOTING OF `. 10 LAKHS HANDED OVER TO SHRI SUNDER ANNA (BUNTER BHAVNA) ON 23.3.2007 WHICH WAS COLLECTED FROM DIFFERENT MEMBERS OF OUR COMMUNI TY SPREAD OVER ENTIRE MUMBAI. 8. FURTHER, IT IS SEEN THAT THE APPELLANT HAS GIVEN JOINT CONFIRMATION LETTERS FROM VARIOUS PERSONS WHICH CON TAINS THE NAME, ADDRESS OF THE PERSON AND THE AMOUNT CONTRIBU TED. THE A.O. WITHOUT VERIFYING THE GENUINENESS OF THE APPEL LANTS CLAIM HAS ADDED `. 10 LAKHS STATING THE PAN OF THE CONTRIBUTORS WERE NOT PROVIDED. I AM OF THE VIEW FOR SUCH A GENERAL CAUSE, NORMALLY WELL KNOWN PERSONS IN THE COMMUNITY USED T O COLLECT DONATION ON BEHALF OF SANGH AND HANDOVER THE PROCEE DS TO THE SANGH. IN THIS CASE, THE APPELLANT HAS CATEGORICAL LY STATED IN THE SWORN STATEMENT THAT HE COLLECTED THE DONATIONS TO HAND OVER `. 10 LAKHS TO THE REPRESENTATIVES OF THE SANGH. THE APPELLANT HAS ALSO FURNISHED JOINT CONFIRMATION CON TAINING THE NAME AND ADDRESS OF THE CONTRIBUTORS. CONSIDERING ALL THESE FACTS, I AM OF THE VIEW THAT THE APPELLANT HAS SUBS TANTIATED ITS CLAIM WITH PROPER EVIDENCES. IN VIEW OF THIS, I HO LD THAT THE ADDITION IS NOT JUSTIFIED. I DIRECT THE A.O. TO DE LETE THE ADDITION OF `. 10 LAKHS. 4. THE LD. DR SUBMITTED THAT IN ABSENCE OF ANY COMP LETE EVIDENCE THAT THE ASSESSEE HAS RECEIVED A SUM OF `. 10 LAKHS FROM VARIOUS DONORS, THE SUM OF `. 10 LAKHS HAD RIGHTLY BEEN ADDED BY THE ASSESSING OF FICER. HE SUBMITTED THAT THE ONUS TO PROVE THE SOURCE OF `. 10 LAKHS IS UPON THE ASSESSEE AND WHICH HAS NOT BEEN PROPERLY DISCHARGED AND THE REASONS ITA NO : 6491/MUM/2010 SHRI JAYARAM K. SHETTY 4 GIVEN BY THE ASSESSING OFFICER SHOULD BE UPHELD. L ASTLY, HE SUBMITTED THAT ONCE THE AMOUNT HAS BEEN FOUND TO BE RECORDED IN TH E SEIZED DIARY AND WHICH HAS NOT BEEN DENIED BY THE ASSESSEE, THE PRES UMPTION IS THAT THE SAID PAYMENT HAS BEEN MADE OUT OF THE UNACCOUNTED S OURCE OF THE ASSESSEE UNLESS THERE IS PROPER AND CONCRETE EVIDEN CE TO PROVE CONTRARY. 5. ON THE OTHER HAND, THE LEARNED COUNSEL OF THE AS SESSEE SUBMITTED THAT IN THE STATEMENT RECORDED AFTER THE SEARCH, TH E ASSESSEE HAS CATEGORICALLY ADMITTED THAT HE HAD COLLECTED FUNDS OF `. 10 LAKHS FOR THE PURPOSE OF GIVING THE DONATION FOR THE SOCIAL CAUSE FROM VARIOUS PERSONS BELONGING TO HIS COMMUNITY SPREAD OVER THE CITY OF MUMBAI. THEREAFTER IN SUPPORT OF THIS SWORN STATEMENT, THE ASSESSEE HAS F ILED A COPY OF JOINT CONFIRMATION ALONG WITH THE LIST GIVING NAMES, ADDR ESSES, AMOUNT AND SIGNATURE OF VARIOUS DONORS. A LIST CONTAINS THE NAME OF ALMOST 281 PERSONS. HE THUS SUBMITTED THAT THE REASONING AND THE CONCLUSION GIVEN BY THE LD. CIT(A) IS CORRECT AND, THEREFORE, SHOULD BE UPHELD. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS, PERUSED THE ORDERS OF THE LD. CIT(A) AS WELL AS THE ASSESSING O FFICER AND THE MATERIAL PLACED ON THE RECORD. FROM THE NOTING APPEARING IN SEIZED DIARY IT WAS FOUND THAT THE ASSESSEE HAS PAID A SUM OF `. 10 LAKHS TO A CHARITABLE INSTITUTION FOR THE PURPOSE OF CONSTRUCTION OF SCHO OL BUILDING/COMMUNITY HALL. ON BEING CONFRONTED, THE ASSESSEE HAS GIVEN THE STATEMENT THAT THE SAID AMOUNT WAS COLLECTED FROM THE VARIOUS FRIENDS AND RELATIVES OF HIS COMMUNITY AS DONATION FOR GIVING IT TO THE CHARITAB LE TRUST FOR A SOCIAL CAUSE. FROM THE PERUSAL OF THE CONFIRMATION LETTER AND THE LIST FILED BEFORE THE ASSESSING OFFICER, IT IS SEEN THAT THE LIST CON TAINS NAMES OF 281 PERSONS AND SHOWS THE AMOUNT OF DONATION PAID BY TH EM WHICH RANGES BETWEEN `. 1,000/- TO `. 15,000/- AND MOST OF THEM BEING LESS THAN `. 3,000/-. THE SAID LIST CONTAINS NOT ONLY THE NAME BUT ALSO THE ADDRESSES ITA NO : 6491/MUM/2010 SHRI JAYARAM K. SHETTY 5 AND THE SIGNATURE OF THE SAID PERSONS. THE AMOUNT HAS BEEN COLLECTED BY THE ASSESSEE FOR A PHILANTHROPIC PURPOSES FROM VARI OUS PERSONS FOR PETTY SUMS. THE SAID AMOUNT SO COLLECTED HAS BEEN PAID T O A CHARITABLE TRUST FOR A SOCIAL CAUSE. THE SAID AMOUNT HAS NOT BEEN UTILI SED FOR ANY PERSONAL PURPOSE OR FOR ACQUIRING ANY CAPITAL ASSET OF THE A SSESSEE. THUS THE EXPLANATION OFFERED BY THE ASSESSEE UNDER THESE CIR CUMSTANCES ALONG WITH THE EVIDENCE IS PRIMA-FACIE ACCEPTABLE. THE ASSESS ING OFFICER ALSO HAS NOT CARRIED OUT ANY ENQUIRY FROM ANY OF THE DONORS, THE DETAILS OF WHICH WAS PROVIDED BY THE ASSESSEE TO DISAPPROVE OR CONTRADIC T ASSESSEES CONTENTION. THUS ON THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY REASON TO DEVIATE FROM THE FINDING RECORDED BY THE LD. CIT(A) AND ACCORDINGLY THE SAME IS CONFIRMED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED ON THIS 31 ST DAY OF OCTOBER, 2012. SD/- SD/- ( P. M. JAGTAP ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT: 31.10.2012 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI